Fitch: Katrina-Related CMBS Delinquencies Declining

Hurricane Katrina-related CMBS delinquencies have fallen over the past four months, according to Fitch Ratings’ latest CMBS loan delinquency index. Katrina-related delinquencies now stand at roughly $201.8 million, down from its peak of $268.9 million in December 2005.

Slightly more than 18% of Katrina-related delinquencies ($36.5 million) are real estate-owned (REO) properties. However, Fitch Senior Director Patty Bach says that Fitch “is concerned regarding the outlook for the region as clean-up and rebuilding is reported to be moving slowly.”

Fitch's overall U.S. CMBS loan delinquency index has already fallen five basis points (bps) in March to 0.71%. Three bps of that total is due to the addition of five new deals, totaling approximately $11.5 billion, to the deal universe. The remaining two bps is attributable to loans falling out of the index after becoming less than 60-days delinquent after being paid off, defeased, or liquidated.

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